2 posts from December 2012

I stumbled across some data about Facebook engagement rates the other day.
Apparently Michael Leander has been analyzing how Facebook fans react to brand
posts based on how big a following that brand has on Facebook. It’s made me
wonder – If we know engagement rates, and we know how much it costs to acquire
a Facebook like, we should be able to calculate the cost of fan engagement. How
much does it cost? And is it really worth it?

Leander found that the rate of people who like or comment on
a post starts at less than 1% for a brand of 10,000 Facebook followers and then
plummets the larger the audience. Here are his statistics:

Number Of Fans/Likes

Average Engagement Rate

10,000

0,96 %

20,000

0,29 %

50,000

0,21 %

100,000

0,19 %

200,000

0,16 %

500,000

0,13 %

1,000,000

0,11 %

1,500,000

0,09 %

Compared with banner ad engagement rates, those numbers
might look good. I’m also starting to wonder what the cost of all this is. For
the sake of simplicity, I’m not going to calculate the cost of what it takes to
manage the Facebook channel or to create all of that content people are
engaging or not engaging with.

Instead, I’m going to look at the cost of attaining those
fans and calculating what the cost per interaction is.

Let’s take one year. I’m going to assume that brands might
reasonably attain 10,000 fans without buying any likes (a leap, I know, but
bear with me). For each number above 10,000, I’m going to assume that 1/3 of
those total fans were purchased. That is, brands spent money on Facebook ads to
get people to “Like” them.

Let’s also assume that, on average, a brand posts on
Facebook once a day, or a total of 250 posts per year. With that, the cost per
interaction for a smaller Facebook brand starts at $0.49/interaction over the
year. For a big brand, the cost jumps to $1.59/interaction for a year.

Fans

Bought Fans

Cost

Posts Per Year

Total Interactions

Cost Per Interaction

10,000

250

24,000

20,000

6,667

$7,133

250

14,500

$0.49

50,000

16,667

$17,833

250

26,250

$0.68

100,000

33,333

$35,667

250

47,500

$0.75

200,000

66,667

$71,333

250

80,000

$0.89

500,000

166,667

$178,333

250

162,500

$1.10

1,000,000

333,333

$356,667

250

275,000

$1.30

1,500,000

500,000

$535,000

250

337,500

$1.59

Remember, that’s not covering the cost of managing the
channel or creating content. That’s just the interaction cost. Of course this
is only for a year, if you spread that over 2 years it gets a little cheaper.

The number of interactions isn’t terribly impressive either.
But it starts putting things into perspective, such as:

What is the real impact of an engagement?

If people engage more with emotional imagery,
say of kittens, is it worth the cost to the brand?

None of this starts connecting interactions to
real business goals. Does that matter?

Is it really worth it to purchase fans on
Facebook?

Actually, it’s that last question that’s important. Based on
this calculation, however imprecise, I’d say no.

The business of strategy is a funny one. Lots of people talk
about strategy and ask for it. I seriously doubt that there’s a lot of
commonality in what people believe strategy to be. In its essence, a strategy
is a plan for what to do. Bud Caddell has modern spin on a digital strategy
that I think is a good one.

Is that what businesses want when they ask for a digital
strategy? I don’t think so. So here is what I’m calling the Five Stages of
Strategy: What businesses ask for when they ask for “strategy.”

Tactics – This is by far the most common intent.
We see this in a lot of web strategy but social media has taken this to a
completely new level. Social media strategy has in many cases come to simply
mean: set up our accounts on Facebook and Twitter. Social agencies are
complicit in this bastardization; they’re really selling implementation
services. Strategy is just a way to open the door. Tactics without strategy are
usually not sustainable, though, which is probably why many companies end up paying
big bucks for Facebook Likes and even bigger bucks to communicate with those
new likes through Promoted Posts.

Cover My Butt – One of my favorite stages, this
usually happens in companies with larger internal marketing staffs. The cover
my butters come in a couple of flavors. One flavor is someone who needs a
smokescreen with upper management to ask for more money. It’s also useful for
those who feel pressure from above to move on digital initiatives and want a
way to insure themselves from blame in case things don’t work out. In either
case, the strategy process can be a long one that ends up having little impact
on the actual work.

Prove I’m Right – Many organizations listen to
employees very poorly, if at all. Organizations contain a huge amount of
intelligence, creativity and innovation. Unfortunately no one has time from his
or her busy day to mine that intelligence. In the Prove I’m Right strategy, one
quite often uncovers a plan or idea that some of the key players have pushed
for, without any luck. The strategy from the third party validates that and
provides impetus for implementation. Of course, if you prove someone wrong,
then results may vary.

I Know We’re Behind – It’s easy for people to
look at the success of others and to feel that they don’t measure up. This is a
good place to start, strategically. There’s an uncomfortable acceptance that
people don’t like the place they’re in and want to move somewhere, they just
don’t know where. Strategy has the potential to move organizations like this
along a continuum by providing a plan to do so. The best part about this is
that people who ask for this are already willing to try something new, one of
the key conditions for implementing a successful strategy. The challenge for
the strategy is to not overshoot reality, something that’s easy to do given
both the market place and the desires of the organization.

Help Us Change – The holy grail of strategy is
working with organizations that embrace and recognize the need for change. Face
it; if things were working perfectly, no one would need a strategy, a plan, for
doing things differently. In this phase there’s not only support from upper
management but also a desire from employees to do things differently. While not
all strategy is change, change is a critical part of most great strategies.
When organizations reach this stage of strategy they are usually poised for
great success.

The red thread through all of this is tolerance for internal
and external change. Many organizations
have no desire or tolerance for anything beyond cosmetic changes. That’s why
the first stage, tactics is so popular.

While Elisabeth Kubler-Ross would probably turn in her grave
if she read this, it’s worth thinking about before that next strategic
engagement. Ask the question to determine what strategy stage your
organization, or client, is at. It will make the results that much more
palatable.